Columbia Sportswear Company (COLM) is gearing up to announce its third-quarter 2023 earnings on October 26. Analysts anticipate strong top-line growth, with revenue estimated at $999.8 million, reflecting a 4.7% increase compared to the previous year’s quarter.
While the consensus estimate for quarterly earnings per share is $1.68, marking a decline of 6.7% from the year-ago quarter, it’s important to note that Columbia Sportswear has a strong track record of surpassing earnings expectations, with an average four-quarter earnings surprise of 149.5%.
Factors to Watch
Columbia Sportswear has been leveraging brand-enhancing marketing initiatives to strengthen its presence in the apparel industry. The company’s focus on demand-creation investments has not only increased brand awareness but also driven sales.
Columbia Sportswear has prioritized enhancing the consumer experience, particularly through its digital capacity and direct-to-consumer (DTC) business. By expanding its support processes and capitalizing on the growth opportunities in DTC, the company has seen significant sales growth. In the second quarter of 2023, DTC sales increased by 5% to $292.6 million, with e-commerce performing particularly well.
In addition, Columbia Sportswear has experienced growth in regions like EMEA and LAAP, supported by earlier Fall 2023 distributor shipments and increased sales in China. The company expects China to remain a key growth market, with strong store traffic and robust e-commerce performance.
However, it’s worth noting that Columbia Sportswear has been facing higher SG&A costs, mainly due to supply chain, DTC, and technology-related expenses. In the second quarter of 2023, SG&A expenses rose by 11% to $312.5 million. Management expects the operating margin for the third quarter of 2023 to be in the range of 13.2-13.6%, representing a decline compared to the third quarter of 2022.
What Analysts Predict
According to our analysis, the Zacks model doesn’t indicate a conclusive earnings beat for Columbia Sportswear this time. Factors such as a neutral Earnings ESP (Earnings Expected Surprise Prediction) of 0.00% and a Zacks Rank of 3 suggest that an earnings beat is unlikely. Investors interested in finding stocks with a higher likelihood of beating earnings expectations should consider exploring other options.
However, here are three companies that our model suggests could deliver an earnings beat this quarter:
1. Church & Dwight Co. (CHD): With an Earnings ESP of +5.00% and a Zacks Rank of 1, Church & Dwight Co. is projected to witness top-line growth in the third quarter of 2023.
2. The Boston Beer Company (SAM): The combination of a +0.71% Earnings ESP and a Zacks Rank of 3 positions The Boston Beer Company for bottom-line growth this quarter.
3. Colgate-Palmolive Company (CL): Colgate-Palmolive carries an Earnings ESP of +0.37% and a Zacks Rank of 3. The company is expected to see growth in both its top and bottom lines in the third quarter of 2023.
If you’re interested in these earnings reports or want to stay updated on upcoming earnings announcements across various companies, check out the Zacks Earnings Calendar.
To read more financial news and analysis, visit Zacks.com.
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Disclosure: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of Nasdaq, Inc.